For victims of advertising fraud, the real battle begins not at the moment of deception but afterward. Even when they decide to pursue legal action, they often hit a wall. One person who understands this wall better than anyone is Choi Jin-hyuk, the head of the Minseong Sangsaeng Research Institute. This nonprofit organization was formed by a group of like-minded lawyers and voluntary victims to assist small business owners who struggle with legal costs or are unaware of the relief processes available to them. They provide free or minimal-cost support for legal responses, including consultations, sending formal notices, and drafting lawsuits.
Choi's motivation to help victims stems from a surprisingly humble beginning. After being assigned to a social welfare facility as a public service worker in his thirties, he began to explore the small business community 'It Hurts Because I'm a Boss' during his free time, drawing on his past experience in advertising. He noticed that entire pages of the forum were filled with posts about advertising fraud, prompting him to start helping victims out of sheer frustration, which has now resulted in numerous successful cases. Operating under the nickname 'Indomitable Driver,' he runs a Naver blog where he exposes the names and unfair practices of fraudulent companies while sharing tips on how to seek relief.
On July 10, the investigative team from Aju Economy met with Choi in a studio in Gangnam, Seoul, to delve into the realities of advertising fraud. Drawing from his extensive experience with hundreds of consultations, he outlined the timeline of these scams and how to respond. While the language used by different companies may vary slightly, the methods they use to ensnare victims are remarkably similar. By tracing the tactics from initial contact to payment, evasion, and delayed responses, one can understand why this industry has persisted for so long.
Fraudsters primarily target novice business owners who have recently registered their businesses on portal sites. They often call stores within a month of their opening, impersonating Naver representatives or claiming to be part of a selection process for local outstanding businesses. If the business owner remains on the line, they subtly guide them toward making a payment without ever explicitly mentioning the word 'payment.' Instead, they mislead the owner by asking to check their credit card limit, clouding their judgment before pushing for a transaction.
When business owners eventually realize the situation and demand to cancel the contract, the scammers' demeanor changes drastically. They either cut off communication, claiming that work has already begun as stipulated in the contract, or they pressure the victims with exorbitant penalties that deduct a significant portion of the principal. For instance, when a contract worth 1.32 million won was attempted to be canceled after a month, the company cited a few formal blog posts as justification for deducting 100,000 won per post, ultimately returning only 400,000 won. Consequently, small business owners find themselves trapped in contracts and legal frameworks that cleverly evade the law, leaving them powerless and without their funds.
What particularly disheartens these victimized business owners is the cold indifference of public relief systems. Choi pointed out the contradictions in current laws and the limitations of judicial institutions, stating, "When victims knock on the door of the Korea Consumer Agency, they receive a standard response: 'You are not consumers but business operators engaged in commercial transactions, so we have no jurisdiction.'" He added, "No matter how much they appeal to law enforcement or mediation agencies, they are met with the same refrain that there is nothing that can be done under the law," emphasizing that the structure that categorizes sole proprietors or small businesses with fewer than five employees as equal to large corporate decision-makers is fundamentally flawed.
As the law and regulations continue to overlook victims trapped in the 'business operator' framework, one individual has stepped up to take action. Choi's chosen method is the popularization of legal knowledge and what he calls a 'counter-offensive litigation strategy.' Fraudulent companies embed toxic clauses in their contracts to prepare for future lawsuits, specifying that all trials must occur in their local jurisdiction. This regulation creates a significant barrier for small business owners, as it is practically impossible for them to take time off during weekdays to travel several hours to distant courts. Scammers have exploited these practical limitations of small business owners.
Choi has turned this structural asymmetry on its head. He recognized that company representatives are often embroiled in simultaneous lawsuits from victims across the country. He submitted a statement to the court highlighting the unfairness of the clauses, establishing a method to transfer the jurisdiction from the company’s favorable court to the court of the victim's residence. He is also sharing this strategy with victims through his blog.
Once the jurisdiction shifts to the victims' local courts, the balance of power changes. Fraudulent companies, unable to manage trials across various courts nationwide, often withdraw their lawsuits or agree to refunds. This strategy not only leads to victories but also makes it nearly impossible for the opponent to fight back. Thanks to Choi's efforts, more small business owners are standing alone in court, achieving refund judgments ranging from 90% to even 100% in their favor against fraudulent agencies.
However, even with jurisdiction shifted in their favor, another barrier remains: the costs associated with litigation. From attorney consultations to sending formal notices and drafting criminal complaints and civil lawsuits, individuals face legal expenses that can amount to hundreds of thousands of won. For small business owners whose losses range from 1 million to 2 million won, the costs to reclaim their rights can paradoxically exceed the amount they lost. Consequently, many are forced to abandon their pursuit of justice due to financial constraints, even when legitimate relief processes are within reach.
This is why Choi has dedicated his personal time and finances to assist victims. He has been providing consultations and document preparation at no cost or for minimal fees to ensure that small business owners do not give up their rights. Additionally, he guides victims through the legal response process via his blog. During the previous W○Commerce incident, which affected thousands of victims, the Minseong Sangsaeng Research Institute's legal team worked tirelessly to provide legal assistance.
Choi expressed frustration, stating, "When the damage amounts to 1 million to 2 million won, the combined costs of attorney consultations, formal notices, and complaint drafting can far exceed the original loss. Scammers know that small business owners, lacking legal knowledge and funds, will ultimately fall off at this point."
Recently, the Fair Trade Commission has begun to take action, referring 18 malicious advertising agencies to the police for investigation on fraud charges. However, the deceptive practice of changing corporate names and signs when refund demands surge continues to be cleverly repeated across the industry. The market has become so muddled that even payment gateway companies handling small business card transactions have classified these advertising agencies as gambling-type businesses, strictly limiting approval limits. The rapid emergence and disappearance of fraudulent companies outpace the government's ability to respond, highlighting the grim reality of this social crime.
Ultimately, a support system that can shift jurisdiction and bear the legal costs is essential for victims to have a chance to stand in court. In a situation where public relief systems are paralyzed, the goodwill and efforts of individuals are crucial. This reality underscores the structural limitations of this crime. In a world where the speed of legal protection lags behind the evolution of crime, the assistance provided by the Minseong Sangsaeng Research Institute starkly illustrates the urgent need for a robust system to prevent social crimes.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.